Chapter 10 Flashcards
Monique, age 42, earns $350,000 annually as an employee for CTM, Inc. Her employer sponsors a SIMPLE retirement plan and matches all employee contributions made to the plan dollar-for-dollar up to three percent of compensation. What is the maximum contribution (employer and employee) that can be made to Monique’s SIMPLE account in 2023?
26,000
Ren, age 63 in 2023, is planning for retirement at normal retirement age of 65 from the Salt Lake City coroner’s office, which has a 457(b) plan. Ren has an unused deferral amount of $9,000. He has compensation of $128,000 per year as a mortician/autopsy specialist. Ren wants to know the maximum amount he can defer in 2023 in the 457(b) plan.
$31,500
Which of the following statements is/are correct regarding TSAs and 457(b) deferred compensation plans?
1. Both plans require contracts between an employer and an employee.
2. Participation in either a TSA or a 457 plan will cause an individual to be considered an “active participant” for purposes of phasing out the deductibility of Traditional IRA contributions.
3. Both plans allow a special “final 3-year” catch-up contribution.
4. Both plans must meet minimum distribution requirements that apply to qualified plans.
1 & 4
Which of the following statements is/are correct regarding 403(b) plans?
1. 403(b) plans are eligible for rollover treatment to IRAs, qualified plans, and other 403(b) plans.
2. Investments in stocks, bonds, and money markets are available.
3. Assets in a 403(b) plan are generally 100% vested.
1 & 3
Jovi, age 58, has compensation of $150,000 and wants to defer the maximum to his public 457(b) plan. The normal retirement age for his plan is age 60. How much can Jovi defer in 2023 if he has an unused deferral amount of $60,000 from age 40 to age 49?
$45,000
Dr. Wood has taught accounting at FSU (Florida Sate University) for the last 30 years and is expected to retire in a few years, at age 65. FSU sponsors a 403(b) plan and a 457(b) governmental plan. Both plans have Roth accounts available. She has been diligent and always contributed the maximum amounts to the traditional accounts in each of the plans. She is also a partner in an equipment business that has lost money the last several years and she has a net operating loss carry forward. Which of the following statements is true?
Dr. Wood is able to rollover amounts in the traditional deferral account for the 457 plan into the Roth account without terminating employment.
Which of the following are true regarding 457(f) plans?
- IRC Sec. 457(f) plans are referred to as ineligible plans.
- 457(f) plans are nonqualified deferred compensation plans for state and local governmental employers and for tax exempt employers.
- 457(f) plans are also called “top-hat” plans.
- There is no limit on the amount of deferral with 457(f) plans.
1,2,3, and 4
An employer may reduce the three percent matching contribution requirement for a calendar year in a SIMPLE, IRA, but only under which of the following circumstances?
- The limit is reduced to no less than one percent.
- The limit is not reduced for more than two years out of the five-year period that ends with (and includes) the year for which the election is effective.
- Employees are notified of the reduced limit within a reasonable period of time before the 60-day election period for a salary reduction agreement.
All of the above must be present
Which of the following are correct?
- SIMPLEs provide incentives to small employers to adopt retirement plans for employees with less administrative costs and fewer set-up procedures than qualified plans.
- SIMPLE IRAs can permit loans to employees.
- SIMPLE IRAs require the employer either to match the employee contributions of those who participate or to provide nonelective contributions to all eligible employees.
1 and 3
